Property valuers and accountants 'set for increase in Professional Indemnity (PI) claims' - PI for IFAs

24/11/2008

An increasing number of Professional Indemnity (PI) insurance claims are set to be made against accountants and property valuers.

Such is the assertion of Andy Wood, regional chairman of R3 and partner at business support practitioner the P&A Partnership, who states that a rise in PI claims may take place as the ongoing financial turmoil makes its presence felt on the property market.

Speaking at a meeting of insolvency trade body R3 last week, Mr Wood reported that economic downturns often result in a surge in fraud cases, with the present financial climate proving to be "no exception".

"We expect PI claims to start being made against valuers and accountants because a lot of lenders' securities are now proving hard to establish," he claimed.

Continuing, he reported that a higher number of personal guarantees could result in directors "taking far more of a personal knock" should their property development business fail.

In September, financial services information portal Cherry reported that mortgage brokers may be set to see their PI insurance premiums increase by as much as 500 per cent due to the ongoing impact of the credit crisis.

Professions Division - Associate Director of PYV comments: "Obviously in these uncertain times, with the falling property market, any professional involved in the property business is significantly more likely to be exposed to the possibility of a PI claim than at any other time in recent years.

"Surveyors involved in valuation work are particularly vulnerable; claims are increasing and are expected to rise further leading to an increase in rates and a reduction in insurer capacity.

"Even higher premiums for mortgage brokers could be on the way as their PI rates have been on an upward trend for sometime. Certain firms have already suffered a doubling of their premiums and the continuing credit crisis could well lead to further increases."

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PYV are one of the UK's leading providers of professional indemnity insurance. This news article has been produced by Adfero in collaboration with PYV and its unauthorised use is not permitted.

(c) 2008 Adfero Ltd.

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